The SEC has issued SEC Proposed Dodd-Frank Whistleblower Rules in order to implement Section 21F of the Exchange Act. Section 21F, entitled Securities Whistleblower Incentives and Protection, was enacted as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The SEC is seeking public comments on the proposed rules, which comments are due by December 17. Some commentators believe that the generous bounty provisions of Dodd-Frank will undermine the many corporate compliance programs put in place or strengthened in the wake of Sarbanes-Oxley.

Transitioning from the descriptive to the proscriptive, the October 21, 2010, OECD Phase 3 report also contains a number of specific reform recommendations:

Continue transnational law enforcement cooperation and evidence-sharing to up transnational gains in the global anti-bribery fight.

Consider extending the FCPA's statute of limitations to 10 years to permit adequate time for investigation and prosecution of these complex financial cases.

Reduce business and legal-community uncertainty by more clearly defining what qualifies as a "facilitation payment," spelling out that the term covers not only bribes for obtaining and retaining business, per se, but also improper payments to secure foreign licenses, permits, etc.

Boost transparency, public understanding, and compliance by explaining when, how, and why DOJ and SEC use plea agreements, deferred-prosecution agreements, and non-prosecution agreements, and what circumstances trigger the decision to require corporate monitors.

Consolidate, summarize, and make publicly-available information on the real-world application of FCPA, including on affirmative defense of reasonable and bona fide expenses.

Revise Criminal Resource Manual to explicitly state that the "business nexus test" includes bribes to foreign public officials to (1) obtain or retain business or (2) gain some other improper advantage in the conduct of international business.

Boost awareness of need to pursue books and records violations under the FCPA, including offense of misreporting facilitation payments.

Clarify that state-owned or state-controlled enterprises, persons holding judicial offices in a foreign country, and persons or institutions, such as state-controlled or state-owned enterprises, exercising a public function for a foreign country qualify as "foreign officials" for FCPA purposes.

Viewed from the DOJ and SEC's perspective, the landmark OECD report provides welcome external validation of the effectiveness of their mounting anti-corruption efforts. The U.S., in short, has not only complied with the OECD Anti-Bribery Convention, but has done so to an extent that, according to the report, deserves to be emulated worldwide. U.S. diplomatic pressure, surely buoyed by the OECD's encouraging findings, signals an era of continued domestic and international efforts to stem the tide of global corruption. Companies that fail to appropriately adapt to this new enforcement reality risk exposure not only to massive fines and financial penalties, but also to stiffening criminal sanctions. As the OECD report vividly illustrates, this is a risk increasingly difficult to justify.

By T. Markus Funk (mfunk@perkinscoie.com). Markus is a partner in Perkins Coie's Investigations and White Collar Defense Group. Markus spent the past 10 years as an Assistant U.S. Attorney in Chicago, Illinois, most recently serving in U.S. Attorney Patrick Fitzgerald's Public Corruption and Organized Crime Section. Markus' full bio is at www.perkinscoie.com/mfunk

Federal courts often make an understandable mistake when faced with issues of statutory interpretation in criminal cases, focusing only on precedent that is directly on point. As a result, courts sometimes miss important trends that are broader than a specific statute or case. The fight against overcriminalization—which in part stems from overly-expansive readings of criminal statutes—is one such trend. By reflecting on a decade of Supreme Court decisions invalidating overly-expansive readings of criminal statutes, lower courts might notice the trend and avoid repeating previous mistakes that led to overcriminalization.

Since 1999, and in the midst of stiff opposition from prosecutors and lower courts, the Supreme Court has spend much of its effort curtailing the seemingly-limitless reach of various federal criminal statutes.

Mail and Wire Fraud: In Neder, the Supreme Court rejected the argument that the federal fraud statutes contain no “materiality” requirement in relation to misrepresentations or omissions. In Cleveland, the Court rejected the position that a State’s “right” to truthful information in a license application is “property” protected by the fraud statutes. And most recently, in Skilling, the Court limited the honest-services fraud statute to “bribe and kickback” schemes, rejecting a more expansive interpretation extending the statute to undisclosed “conflicts of interest” and “self dealing.”

Money Laundering: In Cuellar, the Supreme Court disagreed that the federal money laundering statutes criminalize the act of concealing money merely to transport it, rather than transporting money to conceal it. And in Santos, the Court held that the term “proceeds”—at least when applied to illegal gambling—means “profits,” not “gross receipts.”

Bribery: In Sun-Diamond Growers of California, the Supreme Court determined that, contrary to the government’s position, bribery under 18 U.S.C. § 201 requires a quid pro quo—i.e., a link between a “thing of value” and a specific “official act.”

Read in isolation, each decision addresses a specific statute and utilizes—in addition to common canons of statutory interpretation—specific principles to narrow the statute (e.g., fair notice or federalism). But when courts read these cases in isolation, they inevitably end up watering down their true meaning and intended effect. For example, after Neder, courts so broadly interpreted the “materiality” element that misrepresentations and omissions rarely are deemed immaterial; after Santos, lower courts overwhelmingly refused to apply the decision’s definition of “proceeds” outside the gambling context (and Congress later amended the definition to expressly include “gross receipts” in all cases); after Sun Diamond, most courts have refused to require a specific quid pro quo under bribery statutes similar to section 201, such as section 666; and after Skilling, at least one court (the Northern District of New York, in a case called Queri) has allowed the government to repackage invalidated honest-services theories as “intangible property” theories.

If the Supreme Court cases are read together, on the other hand, they show a decade-long trend disfavoring overly-expansive readings of criminal statutes, which contribute to overcriminalization. Equally important, when read together the cases provide all the tools needed to avoid expansive interpretations and overcriminalization, rather than one tool discussed in one case addressing one statute. Lower court’s should keep this Supreme Court trend in mind in future cases.